Legislation Update: “Better Care Reconciliation Act of 2017”

Following the U.S. Senate release of their amendment, the “Better Care Reconciliation Act of 2017” (BCRA), to HR1628, we can already see this “Discussion Draft” has generated just that. At times like this we like to remind plan sponsors that we would not recommend doing any planning based on this Senate bill or the House version that has already passed. First, it is not yet law and, as can be seen from discussions already, a lot of changes can occur between now and the time this actually passes, gets reconciled and signed by the President. These things have a history of changing as they go through the process.

The Senate amendment includes:

Individual and Employer Mandate– Starting from 2016 the individual and employer mandate penalties are zeroed out. The elimination of employer penalties includes the penalty applicable to employers who do not offer health coverage and those who offer health coverage that is not affordable or does not meet minimum value standards.

Pre-Existing Conditions – No Penalty for No Coverage in Individual Market– Insurance companies would not be permitted to increase premiums or deny coverage based on pre-existing conditions. The House bill would allow insurers to impose a 30 percent premium surcharge on consumers who purchase a new plan after letting their previous coverage lapse. States could choose to make this penalty more severe.

Essential Health Benefits– States would be allowed to change what qualifies as an essential health benefit.

And, as in the House bill:

The Cadillac Tax– Delayed until 2026.

HSA Expansion – Provisions include allowing both spouses to make catch-up contributions beginning in 2018, and increasing the maximum contribution limits.

Repeal of Tax on Over-The-Counter Medications – The bill would remove the restriction that drugs are considered qualified medical expenses only if the drug is prescribed under Archer MSAs, HSAs and FSAs and HRAs beginning in 2018.

FSAs– The bill repeals the limitation on health FSA contributions set by ACA for taxable years beginning after December 31, 2017.

Again, there will be much discussion about this amendment and there is no way to know, at this point, if it will make it to President Trump’s desk. We will continue to make every effort to keep plan sponsors informed as the process continues.